Seller Financing CA FTB Form 593 for the Buyer?

[Kenny Wyland]

I'm purchasing a new rental property and the Seller has agreed to do an installment sale (seller financing). The escrow company just gave me a copy of Form 593 which appears to say that, as the BUYER, I must withhold a portion of any principal payment and instead send that directly to the CA Franchise Tax Board. This might make sense if I was the Seller, but the form is asking me to do this as the BUYER.

If I'm reading this correctly, it looks like it's telling me to effectively default on my note. I promised, let's say, to pay $500/month to the Seller. But if Form 593 tells me I need to withhold $10 from each payment (and send directly to the FTB), that means I'm only sending $490 to the Seller each month... and the Note I signed to the Seller says that if I don't pay them $500/month, they can take my property back. I feel like the CA FTB is forcing me to break my promise. 

It's hard enough getting Sellers to agree to financing, but it seems REALLY wrong to me that I need to withhold money from the Seller for their taxes. That's not my business. Am I misunderstanding this form?

Thanks!

Kenny Wyland

CA FTB Form 593